Gary Black Questions Rivian's Earnings and Guidance Following Q4 Report

Rivian Automotive Inc. (RIVN) saw its shares rise over 5% in after-hours trading on Wednesday, but the increase was temporary. This happened despite the company offering conservative guidance for 2025, which left some analysts skeptical. A notable point was that strong sales from regulatory credits helped the electric vehicle (EV) manufacturer exceed expectations for the fourth quarter.

What Happened: Managing Partner of The Future Fund, Gary Black, expressed surprise at Rivian's stock price reaction. He commented on X about the company's fourth-quarter gross profit beat, indicating that it was largely influenced by one-time regulatory credit sales. He termed the fiscal year 2025 guidance as "clearly weak."

In the fourth quarter, Rivian reported record revenue of $1.73 billion, exceeding analyst forecasts of $1.4 billion. The company posted an adjusted loss of 46 cents per share, which was better than the predicted loss of 65 cents. Furthermore, Rivian achieved a fourth-quarter gross profit of $170 million, significantly bolstered by $299 million in sales from regulatory credits.

"RIVN (+5% post market) posted better than expected 4Q revenues and gross profit ($170M vs $64M expected) driven by huge one-time sales of regulatory credits ($299M). FY'25 guidance was light on deliveries, estimating only 46K-51K versus an expected 54.9K, with adjusted EBITDA losses projected at the low end between -$1.7 billion to -$1.9 billion," reported Gary Black on February 20, 2025.

Rivian's CEO, RJ Scaringe, highlighted the company’s improved performance, stating, "This quarter we achieved positive gross profit and reduced the automotive cost of goods sold per vehicle delivered by $31,000 in Q4 2024 compared to Q4 2023. Our emphasis on cost efficiency is crucial for the launch of our mass-market product."

Nonetheless, Rivian's projections for 2025 did not meet Wall Street's expectations. The company forecasted vehicle deliveries between 46,000 and 51,000, falling short of the analyst expectation of 54,900. Additionally, Rivian expects adjusted EBITDA losses of between $1.7 billion and $1.9 billion, along with only "modest" gross profit for the year.

Why It Matters: This cautionary guidance comes at a time of uncertainty surrounding Rivian's $6.6 billion federal loan meant for its manufacturing plant in Georgia, which is currently under review by the Trump administration. This facility is set to produce the company’s affordable R2 and R3 vehicles, with a goal to reach an annual production capacity of 400,000 EVs by 2028.

During the fourth quarter, Rivian also made significant strategic moves, including finalizing a joint venture with Volkswagen AG (VWAGY) worth up to $5.8 billion, and expanding its sales for commercial electric vans beyond Amazon.com Inc..

Price Action: Rivian closed at $13.61, down 2.30%. After hours, the stock gained slightly, up by 0.44%. Overall, the stock is up 2.72% year-to-date but has seen a decline of 14.35% over the past year.

Conclusion: Rivian's latest earnings report showcases a mix of success and caution. While the revenue and profit figures highlight some positive momentum, the weak guidance for upcoming years and external economic factors remain a concern for both investors and analysts.

Rivian, Earnings, Stocks